Oct 16 2007

FSA Part 2: What to do with unspent funds


You readers who have access to a CVS, Walgreens or Rite Aid are going to love this post. And if you don’t, you still can benefit.

Medical flexible spending accounts are a great way to save money on your medical expenses. I explained the rough details about FSAs in a previous post.

If you overestimated how much money to put in your account, you’ll have leftover money to spend. You must spend it, because if you don’t, you’ll lose it.

Fortunately, I have some solutions for those unspent dollars. Check the FSA terms to be sure of the exact items, but you can use your FSA card to buy certain medicines at your drug store. For my plan, I can buy:

Allergy & sinus products, antacids, antibiotics, aspirin/pain reliever, bandages, cold sore treatments, chest rubs, cold & flu medicine, contact lenses/lens cleaner, cough drops/lozenges, cough syrup, fertility things, nasal sprays, and more. Not vitamins, unfortunately. And not tampons, either. Grr.

Look at all that stuff you can buy with pre-tax dollars! Check the expiration dates for those products to make sure they’ll last a few years.

Here’s where you can put your CVS/Walgreens/Rite Aid skills to the test.

In the monthly and weekly sales fliers, look for items you can buy with your FSA account that are free after rebate. For example, say Advil costs $4.99 at Rite Aid, and it’s free after store rebate. Use your FSA card on the initial purchase. Then, fill out the rebate information on Rite Aid’s web site. You’ll get a check for $4.99, have free medicine, and will use your FSA card’s pre-tax funds.

Since you don’t have to mail in your receipts for Rite Aid, you can just hang onto those in an envelope. Typically, FSA plans want you to keep all receipts for verification later on. For Walgreens, where you have to mail in your receipts, you can make photocopies of the receipt for your FSA records.

For CVS shoppers, using your FSA card for the Advil that generates $3 extra care bucks is also a great use of your money. You HAVE to spend the money, and you’re getting some money back by doing it.

Finally, stock up on whatever medicine you can use or donate.

If you have a FSA debit card, as I do, be sure that your purchases with it are ONLY the qualifying items. This means you should go shopping with a list of qualifying items, and you might have to do a separate transaction.


Be sure your FSA plan will allow you to stock up on over-the-counter goods. There may be a stipulation or limit on this.

Posted under Uncategorized | 5 Comments »

5 Responses to “FSA Part 2: What to do with unspent funds”

  1. Stacie

    This is GREAT info! My husband’s employer just suggested we consider this last week and I had NO idea what it was. My question: we have 6 in our family and our limit is $2400/year. It won’t take long to use that up. Supposedly if we use all that up-it switches to an HMO, do you know how that works? Or what, in general happens if you use up all the money by say, April?? :-)

  2. If you use up all of the money, then it’s gone until the new year starts, unfortunately. I didn’t realize they capped it. I guess you have to make the most of that $2,400 and save for the rest of it :)

    I don’t know about the switching to the HMO stuff, but someone in human resources at your husband’s employer might be able to help you make these decisions.

    Good luck!

  3. Hmm. My understanding is that to get reimbursed from an FSA for OTC products, you have to have an immediate need for them, i.e., no stocking up. My contingency plan for leftover funds (not that I’ve ever had any) is always a new pair of glasses. Also, some employers allow a grace period through March 31 of the following year to use up your FSA funds.

  4. Hi CFO-

    Thanks for commenting. Ideally, you’ll never have leftover funds, and if you do, it’ll only be a small amount.

    I don’t know all of the details, but I think everyone should look into their own plans to make sure they’re using the funds correctly.

    I know before I make my OTC purchases, I’ll read the fine print on my plan.

  5. When we extra one year, we moved up some dental work and then stocked up at drugstore.com. They have a FSA store that lists lots of things that are usually covered and they let you print out organized reciepts. Very helpful.

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Hey! I'm Kacie, wife and mother of 3. I write about my family's finance: how we save money, improve our spending, and plan for the future.

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